Trade in Unemployment

Authors: Céline CARRERE, Marco FUGAZZA, Marcelo OLARREAGA, and Fréderic ROBERT-NICOUD We embed a model of the labor market with sector-specific search-and-matching frictions into a Ricardian model with a continuum of goods to show that trade liberalization causes higher unemployment in countries with comparative advantage in sectors with strong labor market frictions and leads to lower […]